HBS Digital Initiative builds community and expertise around digital transformation and tech at Harvard Business School and beyond. We manage this forum to gather and share perspectives from the HBS student community.

Do you TikTok? The world does!!

2018’s most downloaded app in the US and Europe with roots in China, TikTok is on its way to break all barriers to become a truly global app using AI and machine learning to engage the users around the world. [4]

TikTok is a looping short video sharing platform that allows users to create and upload upto 15 seconds videos which are as raw as they can be or as sophisticated as the user wants, using simple tools and special effects provided within the app. Locally, known as Douyin in China, TikTok was launched in 2016 and in the last 2 years its user base has grown exponentially reaching more than half a billion active users with 40% of them outside China making it a first globally successful “made in China” app. ByteDance – the company behind TikTok has become the most valuable startup (valued at $75B), even higher than Uber. [1]

How does TikTok create Value?

TikTok makes “every second count!” – as says its tagline.

Technically, TikTok allows users to upload short videos and it learns viewer’s preferences by the kind of videos watched (fully or partially) thereby queuing the similar videos to keep the user entertained. [2]

From HBS Digital Initiative

What differentiates TikTok from its competitors and previous attempts on short video platforms like ‘Vine’ is it’s extremely simple yet creative platform that empowers users to capture videos directly from their smartphones and share their passion, creative expressions or daily moments through their videos. For viewers, the app allows to browse through videos with a smooth ‘swipe’ keeping them engaged and providing the instant gratification in most cases.

TikTok ‘Challenges’

One of the interesting aspect of the app is the ‘Challenges’ – a short video skit performed by a user and then it goes viral by others creating various responses to a popular meme. This has a tremendous network effect that not only attracts new users but also keeps the current users engaged by making TikTok a part of their daily entertainment.

Social Networking

TikTok allows its users to have global followers – a quick short cut to stardom. The app is mostly used by teenagers who dream to be famous in a short span of time and TikTok gives them a platform to showcase their skills and become an influencer. The concept can be related to 15 seconds to fame as 1 cool video has a potential to make you noticed by millions of viewers.

How does TikTok Captures Value?

Advertisements:

Although it is not quite evident on the app yet but TikTok is quitely testing ads which seems to be an obvious next step to capture value. With data of millions of active users, TikTok can easily target ads to users based on their viewing preferences, interests and demographics. [3] McDonald’s has become one of the first brands in Malaysia to officially partner with TikTok via #BigMacTikTok challenge. [6]

Premium services:

We may expect premium services from TikTok for users soon that can include restricted special effects, higher video reach for uploaders or video watch limit for viewers (which is debatable).

Access to Western World:

TikTok has become the first app to successfully break the barriers to become a global app with a huge American and European user base. This brings great insights to the parent company that can be used to introduce other new products in the market.[4]

The road ahead:

All eyes on TikTok as it becomes global and it is a matter of time that competitors will learn the mantra of success and may come with better apps. There are no big barriers to entry except hesitation of users to move from one app to other but TikTok can face challenges in sustaining its user base and keeping them engaged with new and creative content from other users.

Facebook which already enjoys a much bigger user base of more than 5 times of TikTok is testing its own app ‘Lasso’ which can restrict/hamper TikTok’s growth, specially in the western world.

Content Quality and Parental controls: The freedom to creativity can lead to objectionable content that might not be suitable for different users. Creating the balance between empowering the users to upload whatever they want and ensuring the quality of the content in alignment with the local censorship rules can be a big challenge for TikTok

Having said that, TikTok is definitely leading the race in capturing the share of user’s time on social media in presence of the established giants like Facebook and Youtube. We can potentially see TikTok diversifying itself into more creative ways around short videos and get more and more users onboard leveraging the network effect.

3 thoughts on “Do you TikTok? The world does!!”

This was very interesting and fun to read.
Although TikTok does seem to have key features and a large user base to keep the costumer engaged – I wonder if, like Vine that ceased to exist after 4 years, there is a hype around the product that will eventually die down. It will be interesting to see how TikTok will not only sustain but also differentiate and build on their product to continue growth for more years to come.

I agree that keeping the users active on the platform for years (or even months) is definitely a big challenge for any such platform despite continuous differentiation or creativity. However, TikTok does have, what we can call a second mover advantage. They have seen what doesn’t work and that’s priceless for any startup. The features like ‘swipe’ for next video, user-friendly interface and easy editing of videos are a notch above what Vine or musically had. Moreover, TikTok breaks the expectation of being exceptionally good in terms of idea and execution for a content creator as it was for Vine. The app markets itself as ‘come as you are’ which makes people comfortable to upload silly or casual videos that are funny and entertaining. This greatly expands the content creators pie for TikTok which is a huge advantage and a major driver for future growth.

Nice choice on TikTok! This topic is very interesting to read about. I like the numbers you included which are very informative. Also, the risks over the content control is also right on spot. There were already scandals on the pornographics in TikTok and led the App to be banned in some areas. I quickly looked up for one for your reference. https://www.dw.com/en/indonesia-blocks-pornographic-tik-tok-app/a-44537230

Some thoughts over this app based on personal experience and friends’ feedbacks:
– The challenges can become viral really quickly but the turnover is very fast as well. With so much content uploaded to the TikTok platform every day, the challenges may only last for a week or two. Ads through this platform may need to come up with a way to keep the effect lasting for the length they want.
– It can be addictive as soon as people start using it. I personally spent 3 hours per day on it during vacations. However, once I realized it is detrimental to my daily schedule and productiveness I simply cut it off. I don’t know if the others would experience the same but it can be a concern for the platform that it doesn’t retain the same active users for a long period of time.